It is well-known that if the government want to get the economy going again that small businesses are going to have to be encouraged to expand and grow. One of the primary ways that small businesses expand is by acquiring credit which allows them to make their business growth. Unfortunately, banks are tightening up on credit lending options which means that small businesses are finding it increasingly difficult to find the funding that they need to expand.
For this reason the government are trying to introduce various measures which are encouraging loans to small companies. They’ve also specifically started a scheme which is targeting young people who want to become entrepreneurs by offering them loans. These loans are targeted towards people who are between 18 and 24 years old, and over £80million has been set aside for this scheme.
This is obviously something that is very specific and it is not just these people who need the extra money to expand their business. More established SMEs are also struggling to get credit and a review by Professor Russell Griggs has shown that around 15 percent of small businesses who apply for credit are being instantly refused. This is significantly higher than the figure suggested by the British Bankers Association, who say that only one percent of business are being flatly refusing credit.
Businesses should make sure that they are aware of the steps needed to secure a loan as these can often be useful in increasing the chance of securing a financial product. Small businesses should do an extensive amount of research to find out where the best deals are available, and which banks are most likely to offer them credit.
A great place to start can be talking to your own bank as they are often able to offer discounts to current customers and they will be aware of your financial status. If you’re looking for an alternate source of funds, you should consider social lending.